2018 Preliminary financial results

TGN S.N.T.G.N. TRANSGAZ S.A.

 

According to the Financial Communication Calendar data and compliant with the capital market laws on reporting to capital market institutions and shareholders, SNTGN Transgaz SA Medias informs all those concerned on the unaudited interim yearly financial statements for 2018, prepared in accordance with the International Financial Reporting Standards (IFRS).

The main interim financial and economic indicators obtained at 31 December 2018, compared to the indicators obtained in the same period in 2017, are presented in the following table:       

No.

Name

Obtained

2017

Interim

2018

Increase

0

1

2

3

4=3/2x100-100

1.

Operating revenue before the balancing and construction activity, according to IFRIC12

1.749.946

1.638.578

-6%

2.

Revenue from the balancing activity

120.686

235.427

95%

3.

Revenue from the construction activity according to IFRIC12

63.950

388.554

508%

4.

Financial revenue

190.546

46.853

-75%

5.

Operating costs before the construction activity, according to IFRIC12

1.085.220

1.055.982

-3%

6.

Costs from the balancing activity

120.686

235.427

95%

7.

Cost of assets built according to IFRIC12

63.950

388.554

508%

8.

Financial costs

150.227

25.369

-83%

9.

GROSS PROFIT, of which:

705.045

604.080

-14%

 

§   from operation

664.726

582.596

-12%

 

§   from the financial activity

40.319

21.484

-47%

10.

Income tax

122.984

105.124

-15%

11.

NET PROFIT

582.061

498.956

-14%

12.

Other elements of the comprehensive result

17.826

-2.400

X

13.

Total comprehensive result for the period

599.887

496.556

-17%

Values expressed in *Lei thousand*

Operating revenue before the balancing and construction activity, according to IFRIC12 decreased by 6% as compared to 2017, which is lower by LEI 111.368 thousand.

The revenue was influenced mainly by the following factors:

§  capacity booking revenue  lower by LEI 33.854 thousand due to:

-        booked capacities lower 3.855.158 MWh, with a negative influence of LEI 9.144 thousand;

-        the capacity booking tariff lower by Lei 0,07 /MWh, with a negative influence of LEI 24.710 thousand;  

§  commodity component revenue lower by LEI 125.773 thousand due to:

-  a commodity tariff lower by Lei 0,93/MWh with a negative influence of LEI 130.632 thousand;

-       the gas transmitted capacities higher by 1.056.605 MWh/106.013 thousand cm,  as compared to 2017, detailed by categories of consumers as follows:

 

 

12 months 2017

12 months 2018

Differences

Quantity transmitted for direct consumers

MWh

59.201.654

60.559.629

1.357.975

thousand m3

5.537.653

5.672.485

134.832

Quantity transmitted for distribution

MWh

78.906.375

78.605.004

-301.371

thousand m3

7.332.255

7.303.436

-28.819

Total*)

MWh

138.108.028

139.164.633

1.056.605

thousand m3

12.869.908

12.975.921

106.013

*) transmitted quantity for which transmission services are invoiced

The tariffs between 01.01 and 31.12.2018 as compared to 01.01-31.12.2017 decreased mainly due to:

-        a lower approved revenue in gas year October 2017- September 2018 (Lei 954.322 thousand) as compared to the revenue approved in gas year October 2016 - September 2017 (Lei 1.101.667 thousand) mainly because of the differences for the adjustment of the revenue in gas year 2017-2018 (the efficiency gain redistribution component, the correction component of the total revenue, etc);

-        a lower approved revenue in gas year October 2018- September 2019 (Lei 882.983  thousand) as compared to the revenue approved in gas year October 2017 - September 2018 (Lei 954.322 thousand) mainly because of the differences for the adjustment of the revenue in gas year 2018-2019 (the efficiency gain redistribution component, the correction component of the total revenue, etc);

-        the commodity tariff is lower according to Order 10/2017 of the ANRE President on the amending and supplementing of Order 32/2014 of ANRE President on the approval of the Gas Transmission Regulated Revenue, Total Revenue and Regulated Tariffs Methodology, which establishes the increasing by 5% per year of the percentage by which the approved revenue is recovered by the application of the capacity booking tariff, up to 85%, and the decreasing of the percentage by which the approved revenue is recovered by the application of the commodity tariff. In gas year 2016-2017 the variable component of the total revenue at the basis of the commodity tariffs is 40% of the total revenue and in gas year 2017-2018 it decreased to 35% of the total revenue, and in gas year 2018-2019 to 30%.

§  revenue from capacity booking lower by  LEI 8.909 thousand due to foreign currency exchange gain regarding the contract currency and the application of ANRE Order 34/19 July 2016;

§  other operating revenue higher by LEI 57.168 thousand.

Revenue from the balancing activity increased by LEI 114.741 thousand based on the following factors:

-       quantity higher by 743.263 MWh with a positive influence of LEI 59.836 thousand;

-       trading price higher by LEI 24,49 /MWh, with a positive influence of LEI 54.905 thousand.

Revenue from the construction activity higher by LEI 324.604 thousand, registered in line with IFRIC 12, according to which revenue and costs related to the construction activity or the improvement of the transmission network, in exchange of which the intangible asset is registered, must be acknowledged in line with IAS 11, Construction Contracts.

Financial revenue have a negative influence of Lei 143.693 thousand due to the transfer of the provision for the impairment of Transgaz`s share in the share capital of Nabucco Gas Pipeline International GmbH amounting to Lei 138.544.435 to revenues in 2017. In September 2017 the Vienna Commercial Court issued the decision by which Nabucco Gas Pipeline International GmbH (`NIC`) was disincorporated and on 30 September 2017 the company removed the asset in amount of Lei 138.544.435 from its accounting records and returned to the revenues the provision established in the previous years in the same amount.

Operating costs before the balancing and construction activity according to IFRIC12 decreased by 3% as compared to 2017, which is lower by LEI 29.238 thousand.

The company made savings of LEI 47.052 thousand, mainly in relation to the following cost elements:

§  transmission system technological gas consumption and loss decreased by LEI 3.828 thousand due to the following:

-       amount of gas for technological consumption lower by 165.065/14.208 thousand cm (▼16%), with a positive influence of LEI 12.032 thousand;

-       average purchase price in 2018 higher as compared to 2017 by LEI 9,68 /MWh, with a negative influence of LEI 8.204 thousand;

§  cost of royalty: LEI 16.854 thousand;

§  other operating costs: LEI 19.267 thousand, mainly due to lower cost of provisions for depreciation of current assets;

§  other costs of materials: LEI 4.323 thousand;

§  cost of personnel: LEI 2.781 thousand.

An expense surplus of LEI 17.814 thousand was recorded mainly in relation to the following cost elements:

§  fixed assets depreciation costs: LEI 1.461 thousand;

§  cost of maintenance and transmission: LEI 8.489 thousand;

§  cost of taxes and duties: LEI 4.883 thousand;

§  cost of provision for employees benefits: LEI 2.981 thousand.

The financial cost is lower by LEI 124.858 thousand based on the removal from its accounting records on 30 September 2017 of the asset amounting to Lei 138.544.435, representing Transgaz’s share in the share capital of Nabucco Gas International Company GmbH (`NIC`).

As compared to 2017 the interim gross profit obtained in 2018 decreased by 14%, which is lower by LEI 100.965 thousand.

The interim financial statements for 2018 were prepared according to the EU IFRS, are not audited and are available at the link below.

 

DIRECTOR - GENERAL

ION STERIAN